Automobile

Liberals projected to form next Canadian government; what it could mean for auto

Editor’s note: All dollar figures in Canadian currency.

OTTAWA — The Canadian Press is projecting that the Liberal party will win the most seats in the 2021 federal election in Canada, giving them the best chance to form the next government.

It is not yet clear whether Prime Minister Justin Trudeau will win a majority or need the support of at least one other party to remain in power with a minority government.

As of 10:45 p.m. ET, the Canadian Press projected that the Liberals were leading in 148 ridings, the Conservatives in 103, the Bloc Quebecois in 28 and the New Democratic Party in 22.

Majority or not, the win marks the Liberals’ third government in six years.

What a Liberal government could mean for Canada’s auto sector:

Under previous mandates, the Liberals established a relatively consistent track record for automotive support and investment, particularly when it comes to electric vehicles. 

The government announced in June that it wants all new light-duty vehicles sold in Canada be zero-emissions by 2035, advancing the previous goal five years. However, the government didn’t legislate the goal, avoiding an all-out ban on the internal-combustion engine. The promise made on the campaign trail reiterated the 2035 target, as well as committed to working with industry to develop a regulated sales requirement that would make 50 per cent of light-duty vehicles zero-emissions by 2030.

The plan pushes up the timeline for creating an all-ZEV federal fleet as well. The Liberals now plan to electrify all federal vehicles by 2030, compared to 80 per cent of the federal fleet by 2030 previously.

For the average Canadian, the shift to ZEVs is supported by a consumer incentive program – launched in 2019 — that covers up to $5,000 of eligible vehicles. The Liberal platform pledged an additional $1.5 billion to expand the iZev rebate, making a wider range of vehicles, including used vehicles, eligible.

The plan also sets a target for charging station installations. The party said it will invest an added $700 million to build 50,000 new EV chargers and hydrogen stations – though hydrogen vehicles are not otherwise mentioned in the platform. Another $100 million will be put toward charging station installations in existing buildings.

For automakers, the Liberals’ platform pledged continued support for the $8 billion Net-Zero Accelerator Fund, which backs industrial innovation projects, but introduces no new programs. In this year’s budget, the government proposed reducing the corporate tax rate on car companies building ZEVs. It is currently analyzing feedback from industry stakeholders on the plan that would, starting in 2022, cut in half the tax rate for makers of EVs and batteries.

Also introduced in the 2021 budget, the Liberals’ tax on vehicles costing $100,000 or more has sent shockwaves through the high-end vehicle market, with opponents criticizing the proposed tax as damaging to sales and ineffective. Consultations between government and industry remain ongoing, and the latest election platform recommits to the tax.

With files from the Canadian Press and David Kennedy of Automotive News Canada.

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